Selling Your Gold? Read This First

(MoneyWatch) 
Combine near record gold prices with a recession that's got people scrambling for cash and you create a vibrant market for a dozen mail-in smelters that promise to pay "top dollar" for your clunky old jewelry. These companies say they'll melt down your ugly gold chains and send you a check for the gold value.

The problem is that people get a fraction of the gold value--far less than what they could receive by bringing the jewelry to an old-fashioned pawn shop. Consumer complaints about the sorry returns have been reported extensively in the Los Angeles Times and in a half-dozen online complaint sites.

After the Consumerist, an online forum for consumer news and tips, took on Cash4Gold for being the granddaddy of these anti-consumer practices earlier this year, the site got named in a lawsuit demanding that it knock off the negative news and stop reporting the claims of a former Cash4Gold employee, who detailed a host of smarmy practices.

Instead of backing down, the Consumerist sicked the mystery shoppers employed by their sister company Consumer Reports on them. The result is quite a revealing read and well worth checking out.